Practical Ecommerce

Prepare for the Mobile Commerce Surge

In the past year, mobile commerce has doubled in volume and by 2015 consumers could be spending nearly $24 billion per year from Internet-enabled mobile devices in the U.S. alone.

The mobile commerce market must be taken seriously, explained TRUSTe’s director of mobile products Janet Jaiswal during a live webinar titled “Combining Mobile Computing, Social Media, and Trust to Increase Sales.”

Janet Jaiswal

Janet Jaiswal

Jaiswal cited research data from the Coda Research Consultancy, The Pew Research Center’s Internet and American Life Project, Juniper Research, and others as she made the case for participating in mobile commerce. For example, the Pew survey found that 82 percent of American adults use mobile phones, and on any given day, 57.8 million American consumers access the Internet from a mobile device like a smartphone or tablet.

Mobile Commerce Grows Toward Tangible Goods

What’s more, mobile commerce is not just about ring tones, ads, and apps. A survey of about 1,000 active mobile users conducted by the Mobile Marketing Association in May of this year found that some 6 percent of current mobile transactions were for real products, not just downloadables. And an additional 6 percent of mobile commerce sales were aimed at coupons or discounts that could be applied to tangible goods.

Total mobile commerce sales in the U.S. are expected to reach $2.4 billion, according to Coda Research, and some $4.4 billion in 2011. Even if the percentage of tangible goods stayed flat at 6 percent there would be something like $265 million in mobile sales of real products in 2011.

As a further example of the growth of real product sales from mobile devices, eBay, which is a TRUSTe client, generated some $60 million in mobile revenue last year, according to Jaiswal. The online auction site is projecting $1.5 billion in mobile sales by the end of this year. And eBay’s mobile sales last year were up 200 percent, as well.

6 More Mobile Trends to Watch

Beyond the growth in mobile commerce sales and the general movement toward tangible goods, Jaiswal pointed out six more trends that indicate the mobile market is still growing and is, therefore, appealing for small-to-mid-sized retailers.

  1. Increased Market Growth. “The pace at which the market is growing has accelerated again,” said Jaiswal.

  2. Deceleration of Price Decline. The average price of mobile apps is stabilizing after considerable price declines, perhaps indicating growing demand.

  3. Apple’s Competitors are Increasing their Market Share. In 2010, developers and smartphone users started to focus on platform alternatives to Apple, which lost almost 10 percent of market share in the first half of 2010, explained Jaiswal, This is in part due to new competitors entering the market, and expanding mobile’s general reach.

  4. Android is Everywhere. The Android platform’s exceptional growth is another indication that mobile is expanding more quickly than other markets. The platform’s support of modern web standards also makes it helpful for mobile retailers.

  5. Smartphone Shipments Remain High. In 2010, shipments of smartphones continue to rise. In fact, according to Jaiswal, in just the first six months of the year, smartphone shipments had reached 70 percent of what was shipped in the 12 months in 2009.

  6. Companies are Getting in to the Act. In 2009, less than 10 percent of global companies had a presence in one or more app stores. This percentage has grown markedly in just the first six months of 2010, Jaiswal said.

Summing Up

The mobile market is growing. Mobile consumers are purchasing more tangible goods. And mobile merchants have an opportunity to earn sales.

Ecommerce merchants will still need to differentiate their businesses even in the mobile commerce space. In addition to describing the market opportunity, Jaiswal offered several suggestions and examples for marketing “trust” online in the aforementioned webinar, “Combining Mobile Computing, Social Media, and Trust to Increase Sales.”

Upcoming and Archived Webinars

Click here to view upcoming and archived Practical eCommerce webinars.>

We invite you to suggest topics for future webinars. To do that, please email contact@practicalecommerce.com.

Armando Roggio

Armando Roggio

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  1. el_viejo December 21, 2010 Reply

    Great article! We are planning to move several professional services clients strongly into mobile beginning in Q1 2011. We believe that for a while the use and acceptability may be less, but that there are parallels, i.e. the purchase of products vs. intangibles like lead generation created via mobile devices.